California Gov. Gavin Newsom (D) says he wants to see marijuana federally legalized, in part so that his state’s cannabis farmers can “legally supply the rest of the nation.”
The governor made the remarks in a video that played at the Oakland International Film Festival in September, where activists gave a sneak preview screening of a documentary on the local history of the marijuana reform movement that features Newsom.
He thanked the advocates for their leadership and for helping to reach the “important milestone” of legalizing cannabis in California in 2016, which he said still needs to be improved upon within the state to address the law’s “imperfections.” But the governor also looked forward to federal reform.
“We know, as I’ve said, the fight is not over. We have so much more work to do—not just here in the state, but also at the federal level, to move forward with decriminalization to end federal prohibition,” he said.
Newsom said that federal legalization should “also allow our farmers to legally supply the rest of the nation—that’s critical.”
Unlocking interstate marijuana commerce could prove especially lucrative for California, which has an ideal climate for outdoor cultivation that could help meet demand in other states. Newsom took an initial preparatory step in anticipation of eventual interstate commerce, signing a bill that would let him enter into agreements with other legal states.
That ability would be triggered under the legislation once federal law or guidance permits it, or if the state attorney general certifies in the meantime that the interstate cannabis trade “will not result in significant legal risk” to the state.
The governor emphasized in the new remarks that federal reform should allow farmers to “legally” supply cannabis outside of California. For now, under federal prohibition, the only commercial marijuana exports leaving the state’s borders constitute illegal trafficking. The hope is that authorizing interstate commerce will further help tamp down the illicit market by reducing demand for unregulated products and allowing farmers to make a living legally.
In the meantime, the Newsom administration is separately touting the efforts of an illicit cannabis enforcement task force that he recently formed. That multi-agency effort has resulted in the seizure and eradication of $15 million worth of illegal marijuana plants and processed flower, the state announced last month.
Newsom also said that broader federal reform should be accompanied by expanded efforts to “repair damage that’s been done over the course of decades, generations, to people, to families and communities through this abject failure, this thing called the war on drugs.”
“Similarly, cannabis equity. That’s top of mind—a concept, by the way, born here, not surprisingly,” he said. “The future happens here first and is spreading now across the nation appropriately, and we know that needs to continue and we know we need to strengthen it.”
“We also need to level the playing field and maintain an industry that is as diverse as our state,” the governor said.
To that end, California officials announced last month that the state will be awarding up to $20 million in marijuana tax-funded grants to universities that carry out research into cannabis science and policy—including studies on preventing monopolies in the legal industry and securing the genetics of “legacy” strains.
The academic funding opportunity was announced just days after California officials said that they would be accepting another round of applications for grants to support local efforts to promote equity in the marijuana industry.
The Governor’s Office of Business and Economic Development (GO-Biz) started accepting applications for an earlier round of grants under the program around this time last year, with a total of $35 million made available for localities across the state. This year’s funding cap is set at $15 million.
The department separately distributed a round of community reinvestment grants earlier this year totaling $35.5 million with tax revenue generated from recreational marijuana sales.
GO-Biz announced in July that they’ve awarded 78 grants to organizations throughout the state that will support economic and social development in communities disproportionately impacted by the war on drugs. The amount of funding and number of recipients for that program increased from last year’s levels, when the state awarded about $29 million in grants to 58 nonprofit organizations through the CalCRG program.
Meanwhile, the state is also taking steps to bring more marijuana businesses above board as it continues to mitigate the illicit market.
California started granting provisional marijuana business licenses as a way to more quickly stand up the adult-use market. That temporary licensing category was set to expire last year, but it was extended to give localities more time to complete the permitting process and meet environmental requirements.
Since then, the state has identified a number of jurisdictions that may need additional support to get those provisional licensees into the traditional, annual license category. A separate grant program run by the Department of Cannabis Control (DCC) is providing that licensure funding.
Ensuring that localities are able to effectively stand up a regulated industry is especially important in California, where more than half of the state’s jurisdictions have banned cannabis businesses from operating in their area, which has helped sustain the illicit trade.
Newsom, along with regulators and lawmakers, have attempted to resolve the issue through different means.
The governor has signed about a dozen pieces of cannabis reform legislation this year, including one proposal that will prevent localities from blocking medical cannabis deliveries, along with measures on employment protections for consumers and record sealing of past convictions.
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The legislature delivered numerous cannabis bills to Newsom near the end of the session, and he acted on the majority of them in one fell swoop last month. The governor said the reforms were necessary to help fulfill the promises of legalization and continue to address the collateral consequences of prohibition.
Newsom as a long record of supporting marijuana reform and backing the state’s market, so he’s generally been expected to sign reform measures delivered to his desk. But despite his record, he recently vetoed a key piece of drug policy reform legislation that would have authorized a safe drug consumption site pilot program in the state—a move that’s prompted widespread criticism from the harm reduction community.
San Francisco officials have since signaled that they’re prepared to defy the governor and launch an overdose prevention program regardless of the veto.
In another disappointment for reform advocates, a separate bill that would have legalized possession of limited amounts of certain psychedelics was recently pulled by the sponsor after its main provisions were gutted, leaving just a study component that advocates say is unnecessary given the existing body of scientific literature on the subject.
Here’s an overview of other recent drug policy developments in California:
In July, California officials awarded more than $1.7 million in grants help promote sustainable marijuana cultivation practices and assist growers with obtaining their annual licenses. A total of $6 million will be allotted through the program, which was first announced in August 2021 and will remain open for applications through April 2023.
Regulators also recently announced that they are soliciting input on proposed rules to standardize cannabis testing methods in the state—an effort that they hope will stop marijuana businesses from “laboratory shopping” to find facilities that are more likely to show higher THC concentrations that they can then boast for their products.
California has taken in nearly $4 billion in marijuana tax revenue since the state’s adult-use market launched in 2018, the Department of Tax and Fee Administration (CDTFA) reported in July. And for the first quarter of 2022, the state saw about $294 million in cannabis revenue generated from the excise, cultivation and sales tax on marijuana.
The state collected about $817 million in adult-use marijuana tax revenue during the last fiscal year. That represented 55 percent more cannabis earnings for state coffers than was generated in the 2020-2021 period.
Photo courtesy of California State Fair.